Town Watched Wallet, but Maybe Too Well

KATIE ZEZIMA

Sunday

Sep 30, 2007 at 4:32 AM

Residents of Fair Haven, Vt., were angry to discover that their town has accumulated a surplus of nearly $1 million over the last decade.

FAIR HAVEN, Vt., Sept. 26 — This town of about 3,000 has a problem that most municipalities would envy: a budget surplus of nearly $1 million, or about two-thirds as much as it spends annually. But many residents are not pleased with the news. They say the town mishandled their money or overtaxed them, and some want the town to issue each resident a reimbursement check.

“I’m not happy they have all that money,” said a resident, Neil Belden. “I’m pinching pennies. I’d appreciate a check.”

It appears the surplus, which has accrued since 1994, came about because each year the town did not spend the full amount allotted for projects like road paving. Rather than apply the money to the following year’s budget, the town treasurer invested the extra money in interest-bearing certificates of deposit and bank accounts, and a new budget was created from scratch.

The town manager, Serena Williams, and the treasurer, Suzanne Dechame, say the surplus has always been public knowledge, listed on the town budget as “unreserved funds.”

“No one is being overtaxed,” Ms. Williams said.

The surplus was discussed two years ago at the annual town meeting, where the handful of residents attending voted to freeze the town’s property tax rate. But no one called the extra money a surplus, so some say they did not know the money was one, and few thought about it until a few months ago.

Some selectmen, who are responsible for approving the budget, say they did not know the town was flush until recently because past town managers never told them. “How did this happen?” said John Lulek, who has been a selectman for 20 years. “I don’t know.”

About 150 residents signed a petition asking for an outside audit of the town’s finances to determine whether residents were overtaxed. The annual report from the town’s auditors is due at the end of October.

No one in town thinks anything improper happened, but many believe that there is a general lack of communication about the budget.

“I don’t think there was anything malicious going on up there,” said Peter Nardell, an emergency medical technician who has been poring over the budget. “There’s just a lack of the ability to keep track of this budget, so no one knows what’s going on with this money. This is just as bad as a deficit.” Some think the surplus was born of Yankee frugality.

“I think part of it is that we’re tight, we’re frugal Vermonters, and they said, ‘Let’s budget 100 and spend 90, and we’ll be heroes,’” said a resident, Kevin Durkee, whose son Joshua is the new town auditor. “But I’ve never seen so many people so concerned about something in this town, and I’ve lived here all my life.”

Willard Sterne Randall, a distinguished scholar in history at Champlain College in Burlington, said Vermont was formed when residents refused to pay taxes to both New York and New Hampshire, and a culture of frugality had survived. Mr. Randall said Fair Haven, on the New York border west of Rutland, was “the birthplace of tax resistance in Vermont.”

He added, “It’s interesting to me that a place like that has this consciousness going back to the beginning.”

Officials said reimbursing residents was not an option because it would be a logistical nightmare. Instead, residents will vote on how to use the money after the questions surrounding it are straightened out. A representative from the Vermont League of Cities and Towns, a municipal organization, is coming here in the next few weeks to offer assistance.

“Once we deal with the surplus, we’ll get it in the voters’ hands and let them decide,” Selectman Ron Adams said. “We’ll close out the year like we should, with a zero balance, and if there’s any left over it will go into the next year’s budget. As long as I’m on the board, everything will be disclosed at town meeting.”

Regardless, residents say they want answers now.

“Of course we want our money back,” said Joe Barslow, who was drying clothes at the town Laundromat. Mr. Barslow’s father was the former town manager but has not shared anything about the surplus with his son. “It’s a mystery. Everyone likes a good mystery now and then, but this is our tax money.”

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